Really? A Failed Citibanker for Treasury Secretary?

The Wall Street Journal isn't impressed by Jack Lew

By Kevin Spak,  Newser Staff

Posted Jan 28, 2013 1:31 PM CST

(Newser) – Few Wall Street denizens were laughing during the 2008 financial crisis, but if someone had said the head of Citigroup's Alternative Investments unit would be Treasury Secretary in five years "the line would have brought the house down," a Wall Street Journal editorial quips today. Jack Lew's CAI was infamous for hiding risky mortgage vehicles outside of Citi's balance sheet, and was full of collapsing hedge funds, all under the auspices of perhaps America's most troubled too-big-to-fail bank.

Lew's defenders say the damage was done before his 2008 takeover. But "taxpayers who ended up underwriting his seven-figure compensation might want to know what exactly he was doing to clean it up." Lew's backers also absolve him of guilt for his tenure atop Citi's Global Wealth Management Division, which sold toxic mortgage assets to clients. But again, no one can say what Lew did to improve matters. "There was a time," the Journal quips, "when you had to be successful on Wall Street to become secretary of the Treasury." Click for the Journal's full editorial.

Jack Lew, who President Barack Obama has nominated to be the new treasury secretary, arrives on the West Front of the Capitol in Washington, Jan. 21, 2013, for President Barack Obama's inauguration.   (AP Photo/Win McNamee, Pool)
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The fact that almost no one seems to know what exactly he did for that paycheck underlines the fact that Mr. Lew comes to this job not as an expert or practitioner in financial markets, but as a political actor. - The Wall Street Journal

The greatest irony is that given Mr. Lew's crisis-era resumé, he bears a remarkable resemblance to the bankers who President Obama says created the financial crisis and deserve federal investigation. - The Wall Street Journal

Now an alum from this most political of banks will chair the financial risk council and decide how failing firms are resolved. The next time Citi gets in trouble, who wants to bet against help from Washington? - The Wall Street Journal

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